FIRE, READY, AIM! The
commands are correct but, we must have the right sequence if we want to hit our
target. If business ownership is your quest -- the five steps listed below
summarize the sequence of steps involved in finding the Right Business for you.
Step One -- Self Analysis and Financial Review
Inventory your skills, talents and interests, lifestyle needs and resources.
Create a mental picture of your ideal business. Ideally, how would you be
spending your work day? What special skills or interests can you bring to
your enterprise? Will family members be involved? What are their
interests, skills and talents? How would they fit into your picture of the
Determine the minimum amount of income you will need from your business to
maintain the lifestyle you have created. How much capital are you willing
to invest (risk)? What are the sources of your capital?
Once you have developed your "profile" you are now ready to begin.
We have developed a "Buyer Profile and
Business Identification Workbook" which has assisted hundreds of
opportunity seekers hone in on and identify their "perfect business."
Step Two -- Prepare to search
Many good books and software programs are available on how to acquire, finance,
operate and grow a small business. If you don't have at least one in
your personal library, get one now. If you envision a small business
(Revenues under $20 Million) then "In& Out of
Business . . .Happily" with its companion software "VALUware"
might be a good choice.
Research targeted industries. Arrange for equity loans now if you intend to use
such funds in acquiring your business. Arranging for equity line of credit
before you find your business gives you much more flexibility and leverage.
Imagine, for example, negotiating financing with the business owner and
banker at the same time.
Step Three -- Begin the Search
Ideally you want a business in need of the skills and resources you can provide.
Interview brokers, intermediaries, accountants, bankers and others to
uncover opportunities. Conduct your own direct contact campaign to
targeted industries or engage a firm to search for you. When a target is
found, overview data is gathered.
Step Four -- Letter of Intent (or Conditional Offer to Purchase)
A Non Binding offer to purchase spelling out proposed price, terms and
conditions of sale is prepared. Either side may revise or quit for any
reason. "Letters of Intent" or "Offers to Purchase"
and other paperwork relating to the buy-sell process are generally provided by
your Business Broker or Intermediary. This paperwork plus Due
Dilligence and other check lists are also available on DealMaker
Once agreement is reached, due diligence begins.
Step Five -- Due Dilligence and Closing
Check out business thoroughly. Engage professionals to assist in due
diligence and closing. Confirm willingness to buy. Closing documents
are prepared, reviewed and executed. Money is exchanged for keys.
Congratulations, you now own your own business.
This article has been condensed from "In
and Out of Business... Happily."
Want more information? Call 1-508-791-5600
or complete the form below.